Which of the following is an advantage of peak-load pricing?
A)It allows a firm to reduce its total cost by reallocating its production.
B)It allows a firm to capture the entire consumer surplus.
C)It allows a firm to clearly identify each consumer's willingness to pay.
D)It reduces monopoly profits and increases consumer surplus.

Question

Quizplus · Accepted Answer

Peak-load pricing allows a firm to reallocate its production to times when demand is higher, thereby reducing costs associated with overproduction during off-peak times and underproduction during peak times. This strategy helps in managing demand more efficiently and can lead to cost savings.

Which of the Following Is an Advantage of Peak-Load Pricing